Global Insight 4: 16-05-2017
Our weekly round up of stories that caught our eye from around the world on energy system change.
Mini-grid trial a success
AusNet Services, Victoria’s transmission operator and owner of one of the three distribution network service providers, has announced the success of their Melbourne based mini-grid trial. The trial connected 8 homes, 2 of which had no solar or battery storage, in the Melbourne suburb of Moroolbark. Using a cloud-based mini grid control system provided by energy technology company GreenSync, the project was successfully able to disconnect and reconnect to the grid without losing power to any of the homes. AusNet see this trial as a positive step towards future network security which could alleviate the pressures caused by storms and the rise in DER.
Mini-grids have also been taking centre stage in Western Australia with the state-owned and run Horizon Power opting to use mini-grids in remote locations, again prompted by the rise in forest fires and storms which have left communities without power. They are also trialling micro-grids on a larger scale with the combination of gas, domestic and industrial solar and storage in the Onslow Power Project.
These projects will give valuable insight into the value of DER compared to the traditional poles and wires.
(Some) European companies bail-out of coal?
Many European utilities look like they are increasingly turning their backs on coal-fired power generation. EDF is selling off its 1.8GW Rybnik plant in Poland. This follows the sell-off of coal-fired assets by German utilities over the last few years. Last month Eurelectric announced that its members in 26 out of 28 counties would not build any new coal-fired plants after 2020. The two hold-outs were Poland and Greece. That makes the fact that Greece’s main utility is now also planning a major sell off of assets particularly interesting. The question is, with the trend driven as much by adverse economics as policy pressure, will it find buyers?
Concern about the complexity of electricity regulations in a decentralised system
Klaus-Dieter Borchardt, the European Commission’s director for internal energy markets has said he wants clearer guidance on the next generation of electricity regulations for the potentially very large number of new actors in a decentralised electricity system across Europe. Energy codes systems are notoriously complex and reflect the influence of national transmission owners and large incumbent energy utilities. An advocate for cooperative energy groups points out that: “Local groups, which nine times out of ten are just trying to get their first community project off the ground…don’t have time to dig down into labyrinthine EU codes.”
Denmark as a leader in decentralised energy
There has been a lot of attention paid to the contribution of renewables in Germany recently, but Denmark is even more of a leader. This position has traditionally been due to wind power, where generation is quote often in excess of 100% of demand. However, recently solar has also been an important contributor – State of Green reports that PV owners contributed nearly 30% of power production in the first weekend in May. More generally, Denmark has long been a leader in distributed generation, and around 50% of electricity consumed never enters the transmission system.
Wind investment in Europe rises by 22% in 2016
WindEurope has announced that across Europe, wind power was the largest recipient of power sector investment raising a total of €43 billion, including a record breaking €18.2 billion for offshore, in 2016. This was an increase of 22% from 2015. Although it also noted that there was a fall in onshore investment, the first decrease in five years, and with 80% of investment coming from just 4 countries – Belgium, Germany, Norway and the UK- overall investment levels are expected to fall in 2017. In 2016, renewable energy accounted for 86% of all new EU power installations, of which 12.5 GW was wind and 6.7 GW was solar, with natural gas adding 3 GW.
Mass role out of EV’s likely following Regulatory Approval
A thought provoking report by the RethinkX, highlights the potential for transformative and rapid changes in the transport sector. The analysis suggests that once wide-spread regulatory approval has been given for autonomous electric vehicles (AVs), they will rapidly come to dominate road usage. The authors suggest that by 2030, an expected 10 years after regulatory approval, up to 95% of passenger miles will be undertake using AVs in the US. This will have a profound impact on oil use and lead to an increase, by 18% compared to BAU, in electricity consumption. However, the report also notes the extent to which the vehicle batteries could play in grid balancing, providing up to 1200 GWh of storage and that the 4 million 80kWh batteries per year that are likely to retire from transport use could also be given a second life as stationary storage playing an important role in the integration of renewables.
Community Choice Aggregation
California currently has minimal residential retail competition. Broadly, CA has 3 main investor owned utilities (IOUs), which are joint distribution and supply companies which supply about 70% of electricity. The other 30% is supplied by Muncipal-Owned Utilities or ‘munis’, with the biggest being Sacramento Municipal Utility District and the Los Angeles Department of Water and Power. Technically, there is retail competition although in a de facto sense competition mainly occurs in the non-domestic sectors. It is possible to have Community Choice Aggregation (CCA) which is when a community (and therefore domestic customers) is able, under certain rules, to procure energy for the community; and for Electric Service Providers (ESP, the equivalent of the European supplier concept) that offer electric services directly to retail (including domestic) customers within the main IOU service areas. In practice, ESPs do not provide energy to domestic customers. As a result, a domestic customer in CA who does not live in a CCA area can only buy their electricity from their monopoly IOU or muni.
However, a new CCA: the Los Angeles Community Choice Energy (LACCE) is hoping to bring together 82 municipalities and 1.1 million potential customers – making it the largest in California, and making it an existential issue for the 3 IOUs. At the moment there are 8 CCAs, with a combined 1.25 million customers so the LACCE is a significant jump.
Energy Web Foundation
The Energy Web Foundation is a new partnership between the Rocky Mountain Institute and Grid Singularity for a global blockchain initiative for energy, that brings in ten energy affiliates (Centrica plc, Elia, Engie, Royal Dutch Shell plc, Sempra Energy, SP Group, Statoil ASA, Stedin, TWL (Technical Works Ludwigshafen AG), and Tokyo Electric Power Co (Tepco). Blockchain technology reduces transaction costs by keeping a single logical copy of transaction records—avoiding the need for reconciliation and settlement. It is seen by many as a key enabler of the transition to a clean, secure and cost effective energy system, in part because it helps the active participation of a large number of market participants (end users and devices). The Energy Web Foundation is working to identify, document, and assess the most promising use cases of blockchain technology in the energy sector and will be launching a new energy-focused blockchain platform “Energy Web Platform” to provide the functionalities needed to implement these use cases at scale.